Airwallex Australia Digital Economy Index Q1 2023: NSW, Queensland, Tasmania Lead Battle for Online Business
MELBOURNE / AUSTRALIA - NSW, Queensland and Tasmanian digital businesses have seen their annual turnover jump by up to 13 per cent, even as Aussies’ online spending dropped by more than $124 million nationwide.
The first Digital Economy Index released by payments fintech Airwallex shows Australians have spent $124.1 million less online than a year ago as people buy fewer clothes and products through e-commerce, and redirect some of their spending into booking travel and signing up for education courses.
The Index estimates that online businesses in NSW have seen a 12.94% jump in turnover over the last year, while those in Queensland have jumped 6.14% and Tasmania by 1.9%. Online businesses in Victoria saw a 25% hit to turnover, South Australia was down by 13.6% and WA by 36%.
While the boom in NSW was driven by an increase in local e-commerce income, Queensland and Tasmania benefitted from more online tourism spending. Victorian online businesses slumped from a lag in attracting the education dollar, while the SA and WA declines appear to be driven by lower tourism spending.
In the past 12 months, online spending on Australian education and travel businesses doubled and quadrupled respectively as demand for services post-COVID ramped up. Aussie technology businesses have also seen turnover jump by more than 17 per cent.
Airwallex Director of Strategy for ANZ, Amelia Hamer said the Digital Economy Index showed spending was flat with online businesses in Australia with a slight 0.07% annual decline, which highlighted they were holding up in the face of a negative economic outlook.
“Online businesses are holding more strongly than other parts of the economy but the data shows they aren’t immune from the economic headwinds the world is facing,” Ms Hamer said.
“The message from this data is if you’re going digital, you’re generally going strong. Especially compared to businesses that aren’t part of the digital economy where we’ve seen online business growth outpace the latest ABS data on turnover in almost every category, except retail trade or e-commerce.
“The figures indicate the post-COVID economic recovery is patchy, in full swing across some areas while South Australia and WA, as well as Victoria, continue to struggle.
“There’s an alarm bell for some businesses that rely on international purchases, with the Index highlighting they’ve dropped by 6% since last year, but domestic online consumption has made up for it. Local businesses are increasingly becoming Australians' first choice for online shopping.
“Consumers are still drawn to spend with digital brands, but their reliance on them has waned post-lockdowns. Australian online businesses need to work harder to find opportunities to grow their income and revenue.
“Those smaller businesses that are still feeling the squeeze from the downturn need to keep focused on using the tools that will cut their costs, so they’re well positioned for when conditions pick up again.”
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Airwallex is a global payments and financial platform for modern businesses. We remove the unnecessary friction and cost inherent in the traditional financial system to help entrepreneurs achieve their global ambitions. Leading companies around the world trust Airwallex to manage everything from payments, treasury, and spend to embedded finance - all in one single platform.
Our purpose is to connect entrepreneurs, business builders, makers and creators with opportunities in every corner of the world. With an international footprint across the Asia-Pacific, Europe and North America, we empower businesses to grow without borders.
For more information, please visit www.airwallex.com
The Digital Economy Index focuses on the income turnover for digital businesses as an indication of consumer confidence and the appeal of different types of digital businesses.
The Index monitors the performance and progress of Australian digital businesses, analysing data from a sample of 1000 Airwallex customers, adjusted for company size, industry and geographic location to ensure relevant representation. Airwallex processes nearly $50 billion in annualised transactions each year.
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